MAIBARARA GEOTHERMAL INC., v. COMMISSIONER OF INTERNAL REVENUE (CONSOLIDATED WITH CTA CASE NO. 9500, 9529 & 9555)

REPUBLIC OF THE PHILIPPINES Court of Tax Appeals QUEZON CITY SPECIAL SECOND DIVISION MAIBARARA CTA CASE NOS. 9455, 9500, 9529 GEOTHERMAL, INC., &9555 Petitioner, Present: RINGPIS-LIBAN, P.J, Chairperson, vs. MODESTO-SAN PEDRO, and FERRER-FLORES, JJ COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. Tf; 0 i -~;)_v,_. ~ , ______ X - - - - - - - - - - - - - - ___________________________ X DECISION I FERRER-FLORES, J.: The Petitions for Review pray that judgment be rendered ordering respondent to refund in favor of petitioner the aggregate amount of P17,216,478.45 representing unutilized value-added tax (VAT) input taxes for the four quarters oftaxable year (TY) 2014, broken down as follows: C.T.A. Case No. Quarter Amount 9455 p 3,592,865.27 9500 9529 . 1,905,076.06 9535 9,884,)07.52 1,834,429.60 p 17,216,478.45 THE PARTIES Petitioner Maibarara Geothermal, Inc. is a domestic corporation duly organized under and by virtue of the laws of the Philippines,1 with principal 7 1 Exhibit "P-1", Docket- Vol. III, p. 1275.

DECISION CTA Case Nos. 9455,9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 2 of26 business address at 7th Floor, JMT Condominium Corporation, ADB Avenue, Ortigas Center, San Antonio, Pasig City.2 It is registered with the Bureau of Internal Revenue (BIR) as a VAT taxpayer, under Taxpayer Identification Number (TIN) 006-960-314-00000.3 Respondent Commissioner of Internal Revenue is sued in his official capacity, having been duly appointed and empowered to perform the duties of his office, as the chief of the BIR, the government agency charged with the assessment and collection of all internal revenue taxes, fees and charges, and the enforcement of all forfeitures, penalties and fines connected therewith. He may be served with summons, notices and other court processes at his office at the BIR National Office Building, Diliman, Quezon City.4 ANTECEDENTS (ADMINISTRATIVE LEVEL) Petitioner filed with the BIR its Applications for Tax Credits/Refunds (BIR Form No. 1914) with the BIR on March 30, 2016,5 June 29, 2016,6 September 29,2016/ and December 22,2016,8 for the first, second, third, and fourth quarters ofTY 2014, respectively. On January 4, 201 79 and March 1, 2017, 10 petitioner received letters denying its claim for refund and tax credit certificate for the third and fourth quarters of TY 2014, respectively. PROCEEDINGS BEFORE THIS COURT A. CTA Case No. 9455 On August 26, 2016, petitioner filed the present Petition for Review. 11 The case was raffled to the Second Division of this Court. Respondent then filed, on October 24, 2016, his Answer,12 interposing his special and affirmative defenses.~ Exhibit "P-7", Docket- Vol. III, p. 1301. I d. 4 Par. 2, Summary of Admitted Facts, JSFI, Docket- Vol. III, p. 1045. Exhibit "P-9", Docket- Vol. Ill, p. 1310. 6 Exhibit "P-1 I", Docket- Vol. III, p. I320. Exhibit "P-I 3", Docket- Vol. II, p. I330. 8 Exhibit "P- I5", Docket- Vol. II, p. I340. 9 Exhibit "P-42", Docket- Vol. IV, p. 1610. 10 Exhibit "P-50", Docket- Vol. IV, p. 1715. 11 Docket- Vol. I (CTA Case No. 9455), pp. 12 to 33. 11 Docket- Vol. I (CTA Case No. 9455), pp. 120 to 123.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 3 of26 The case was initially set for Pre-Trial Conference on February 14, 2017. 13 Petitioner subsequently filed a Motion to Consolidate (With Motion to Defer Pre-Trial Conference) on January 25, 2017,14 praying that CTA Case No. 9455 and CTA Case No. 9500, which was raffled to the Second Division of this Court, be consolidated, and that the Pre-Trial Conference of CTA Case No. 9455 set on February 14, 2017 be deferred. In its Resolution dated February 7, 2017, 15 the Court granted petitioner's Motion to Defer Pre-Trial Conference, and ordered respondent to comment on petitioner's Motion to Consolidate. Respondent, however, failed to file his comment thereon. 16 The Second Division then granted petitioner's Motion to Consolidate in its Resolution on February 24, 2017, 17 consolidating CTA Case No. 9500 with CTA Case No. 9455, the case bearing the lower docket number, subject to the conformity of the Third Division. The Third Division of this Court granted the same in the Resolution dated March 2, 2017. 18 In the meantime, petitioner filed a second Motion to Consolidate on February 27, 2017, 19 praying that CTA Case No. 9455, CTA Case No. 9500, and CTA Case No. 9529, which was raffled to the Second Division, be consolidated. Respondent, however, failed to file his comment thereon.20 The Second Division granted petitioner's Motion to Consolidate in its Resolution on March 27,2017,21 consolidating CTA Case No. 9529 with CTA Case No. 9455, the case bearing the lower docket number, subject to the conformity of the Third Division. The Third Division of the Court granted the same in the Resolution dated April 21 , 20 I 7. ~ 22 13 Notice of Pre-Trial Conference dated November 2, 2016, Docket- Vol. I (CTA Case No. 9455), pp. 124 to 125. 14 Docket- Vol. I (CTA Case No. 9455), pp. 136 to 138. 15 Docket- Vol. I (CTA Case No. 9455), p. 144. 16 Records Verification dated February 21, 2017 issued by the Judicial Records Division of this Court, Docket- Vol. I (CTA Case No. 9455), p. 145. 17 Docket- Vol. I (CTA Case No. 9455), p. 152. 18 Docket- Vol. I (CTA Case No. 9455), p. 154 to 155. 19 Docket- Vol. I (CTA Case No. 9455), pp. 146 to 148. 10 Records Verification dated April 5, 2017 issued by the Judicial Records Division ofthis Court, Docket -Vol. I (CTA Case No. 9455), p. 160. 11 Docket- Vol. I (CTA Case No. 9455), p. 159. 21 Docket- Vol. I (CTA Case No. 9455), pp. 162 to 163.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 4 of26 On May 2, 201 7, petitioner filed a third Motion to Consolidate,23 praying that CTA Case No. 9555 be consolidated with CTA Case Nos. 9455, 9500 & 9529, to which respondent failed to file his comment.24 The Court granted the same in the Resolution dated June 14, 2017,25 consolidating CTA Case No. 9555 with CTA Case Nos. 9455, 9500 and 9529. B. CTA Case No. 9500 On November 25, 2016, petitioner filed the present Petition for Review.26 Respondent filed his Answe,-27 on January 16, 2017 where he interposed his special and affirmative defenses. The Pre-Trial Conference for CTA Case No. 9500 was initially set on February 16, 2017.28 Respondent's Pre-Trial Briefwas filed on January 30, 2017. 29 In the meantime, petitioner filed a Motion to Consolidate (With Motion to Defer Pre-Trial Conference) on January 25, 2017.30 The Court granted petitioner's Motion to Defer Pre-Trial Conference in the Resolution dated January 31, 2017,31 and ordered respondent to comment on petitioner's Motion to Consolidate. Respondent, however, failed to file his comment thereon. 32 As earlier detailed, the Court granted petitioner's Motion to i Consolidate in its Resolution on February 24, 2017,33 consolidating CTA Case No. 9500 with CTA Case No. 9455. 23 Docket- Vol. I (CTA Case No. 9455), pp. 164 to 165. 24 Records Verification Report dated May 23, 2017 issued by the Judicial Records Division of this Court, Docket- Vol. I (CTA Case No. 9455), p. 171. 25 Docket- Vol. I (CTA Case No. 9455), pp. 174 to 175. 26 Docket- Vol. I (CTA Case No. 9500), pp. 14 to 36. 27 Docket- Vol. I (CTA Case No. 9500), pp. 91 to 95. 28 Notice of Pre-Trial Conference dated January 19, 2017, Docket- Vol. I (CTA Case No. 9500), pp. 96 to 97. 29 Docket- Vol. I (CTA Case No. 9500), pp. 98 to 101. 30 Docket- Vol. I (CTA Case No. 9500), pp. 103 to 104. 31 Docket- Vol. I (CTA Case No. 9500), p. 109. 32 Records Verification dated February 21,2017 issued by the Judicial Records Division ofthis Court, Docket- Vol. I (CTA Case No. 9500), p. 110. '-' Docket- Vol. I (CTA Case No. 9500), p. 112.

DECISION CTA Case Nos. 9455,9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 5 of26 C. CTA Case No. 9529 On January 26, 2017, petitioner filed the present Petition for Review34 to which respondent filed his Answer,35 interposing his special and affirmative defenses, on February 16, 2017. The Pre-Trial Conference for CTA Case No. 9529 was initially set on March 2, 2017.36 Respondent, however, filed a Motion for Resetting ofPre- Trial Conference on February 23, 2017,37 which the Court granted in the Order dated February 24, 2017,38 resetting the same to March 30, 2017. On February 27, 2017, petitioner filed a Motion to Consolidate (With Motion to Defer Pre-Trial Conference).39 The Court noted petitioner's Motion to Defer Pre-Trial Conference without action in the Resolution dated March 3, 2017,40 and ordered respondent to comment on petitioner's Motion to Consolidate. Respondent failed to file his comment thereon.41 As mentioned previously, the Court granted petitioner's Motion to Consolidate in the Resolution on March 27, 2017.42 D. CTA Case No. 9555 Petitioner filed the present Petition for Review43 on March 28, 2017 Thereafter, on May 2, 2017, petitioner filed a Motion to Consolidate.44 In the meantime, on May 22, 201 7, respondent filed his Answer45 where he interposed his special and affirmative defenses. ~ 34 Docket- Vol. I (CTA Case No. 9529), pp. 10 to 33. 35 Docket- Vol. I (CTA Case No. 9529), pp. 81 to 84. 36 Notice of Pre-Trial Conference dated February 20, 2017, Docket- Vol. I (CTA Case No. 9529), pp. 86 to 87. 37 Docket- Vol. I (CTA Case No. 9529), pp. 88 to 90. 38 Docket- Vol. I (CTA Case No. 9529), p. 96. 39 Docket- Vol. I (CTA Case No. 9529), pp. 98 to 101. 40 Docket- Vol. I (CTA Case No. 9529), p. 109. 41 Records Verification dated March 23, 2017 issued by the Judicial Records Division of this Court, Docket- Vol. I (CTA Case No. 9529), p. 105. 42 Docket- Vol. I (CTA Case No. 9529), p. 108. 43 Docket- Vol. I (CTA Case No. 9555), pp. 10 to 33. 44 Docket- Vol. I (CTA Case No. 9555), pp. 98 to 101. 45 Docket- Vol. I (CTA Case No. 9555), pp. 111 to 113.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 6 of26 As detailed earlier, the Court granted the consolidation of the case in the Resolution dated June 14, 2017,46 consolidating CTA Case No. 9555 with CTA Case Nos. 9455, 9500 and 9529. For the consolidated cases: On August 10, 2017, respondent transmitted the BIR Records for this case, contained in one folder, consisting of 292 pages.47 The Pre-Trial Conference was set and held on September 5, 2017.48 Prior thereto, Respondent's Pre-Trial Briefwas filed on August 29, 2017,49 while petitioner's Consolidated Pre-Trial Briefwas submitted on August 31, 2017.50 On September 20, 2017, the parties submitted their Joint Stipulation of Facts and Issues. 51 The Pre-Trial Order was then issued on October 12, 2017. 52 As trial ensued, petitioner offered the testimonies of the following individuals, namely: (1) Mr. Helenio B. Seraspi,53 petitioner's Accounting Manager; (2) Maria Victoria M. Olivar,54 petitioner's Geosciences Manager; and, (3) Clifford, E. Chua,55 the Court-commissioned Independent Certified Public Accountant (ICPA).56 The Report of the ICPA was submitted on February 14, 2018.57 On March 7, 2019, Ms. Olivar and ICPA Chua were presented as petitioner's witnesses. '\ I 46 Docket- Vol. I (CTA Case No. 9455), pp. 174 to 175. 47 Compliance dated August 10,2017, Docket- Vol. I (CTA Case No. 9455), pp. 191 to 192. 48 Notice of Pre-Trial Conference dated July 3, 2017, Docket- Vol. I, pp. 177 to 178; Minutes of the hearing held on, and Order dated, September 5, 2017, Docket- Vol. II, pp. 652 and 654 to 655, respectively. 49 Docket- Vol. I, pp. 198 to 20 I. 50 Docket- Vol. I, pp. 221 to 228. 51 Docket- Vol. II, pp. 656 to 661. 52 Docket- Vol. II, pp. 673 to 679. 53 Exhibit "P-51 ",Docket- Vol. I, pp. 236 to 255; Minutes of the hearing held on, and Order dated, January 15,2018, Docket- Vol. 2, pp. 709, and 711, respectively. 54 Exhibits "P-55", Docket- Vol. I, pp. 212 to 217; Minutes of the hearing held on, and Order dated March 7, 2019, Docket- Vol. 2, pp. 808 to 810. 55 Exhibits "P-60" and "P-53", Docket- Vol. 2, pp. 703 to 707, and pp. 768 to 788, respectively; Minutes of the hearing held on, and Order dated, January 15, 2018, Docket- Vol. 2, pp. 709, and 711, respectively; and Minutes of the hearing held on, and Order dated March 7, 2019, Docket- Vol. 2, pp. 808 to 810. 56 Oath ofCommission dated January 15, 2018, Docket- Vol. 2, p. 709; Minutes of the hearing held on, and Order dated, January 15,2018, Docket- Vol. 2, pp. 709, and 711, respectively. 57 Exhibit "P-52", Docket- Vol. 2, pp. 716 to 760.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 7 of26 Subsequently, petitioner filed a Motion to Reopen Proceedings (with Motion to Defer Filing ofFormal Offer ofEvidence and Motion to Recall the ICPAY8 on April 8, 2019, which was granted by the Court in the Resolutions datedApril12, 201959 and June 17,2019.60 The hearing for the recall ofiCPA Chua was held on September 12,2019.61 Respondent filed a Manifestation, stating that he will no longer present any witness for this case, on October 16, 2019.62 On October 17, 2019, petitioner filed a Motion to Recall Witness (with Motion to Defer Filing ofFormal Offer ofEvidence),63 which was granted by the Court in the Resolution dated December 13, 2019.64 The hearing for the recall ofMr. Seraspi was held on March 12, 2020.65 Petitioner filed on July 17, 2020 its Formal Offer of Evidence66 and Omnibus Motion to Recall Helenio B. Seraspi and Motion to Defer Resolution of Formal Offer of Evidence, 67 to which respondent failed to file his comment.68 The Court, thus, granted petitioner's Omnibus Motion and held in abeyance the resolution of petitioner's Formal Offer ofEvidence.69 On October 5, 2023, petitioner moved for the substitution of Mr. Seraspi, with Mr. Anthony Joseph A. Salarda.70 Hearing was conducted for the presentation of Mr. Salarda on October 12, 2023.71 During the hearing, the Court submitted for resolution the Formal Offer ofEvidence previously filed by petitioner. In the Resolution dated April26, 2024,72 the Court admitted petitioner's offered exhibits, except Exhibits "P-341 " and "P-478", for being totally 1 58 Docket- Vol. 2, pp. 815 to 820. 59 Docket- Vol. 2, p. 822. 60 Docket- Vol. 2, pp. 825 to 827. 61 Exhibit "P-56", Docket- Vol. 2, pp. 835 to 862; Minutes of the hearing held on, and Order dated, September 12, 2019, Docket- Vol. III, pp. 1166, and 1167 to 1168, respectively. 62 Docket- Vol. III, pp. 1181 to 1182. 63 Docket- Vol. III, pp. 1183 to 1187. 64 Docket- Vol. III, pp. 1213 to 1216. 65 Exhibit "P-57'', Docket- Vol. III, pp. 1195 to 1204; Minutes of the hearing held on, and Order dated, March 12, 2020, Docket- Vol. III, pp. 1217, and 1218 to 1219, respectively. 66 Docket- Vol. III, pp. 1243 to 1272. 67 Docket- Vol. III, pp. 1227 to 1232. 68 Records Verification Report dated July 6, 2023 issued by the Judicial Records Division ofthis Court, Docket- Vol. IV, p. 1866. 69 Resolution dated August 4, 2023, Docket- Vol. IV, pp. 1870 to 1872. 70 Motion to Substitute Witness (with attached Judicial Affidavit ofAnthony Joseph A. Salarda dated October 4, 2023), Docket- Vol. IV, pp. 1873 to 1876. 71 Exhibit "P-59", Docket- Vol. IV, pp. 1887 to 1895; Minutes of the hearing held on, and Order dated, October 12, 2023, Docket- Vol. IV, pp. 1969, and 1970, respectively. 72 Docket- Vol. V, pp. 1972 to 1974.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 8 of26 b4l3u2r"re, d"Po-4r 8u7n"r'e"aPd-a4b8le8' toan4d99E"x'h"iPb-i5ts24"Pto-259218""' ' "P-294" ""PP--450850"-B' ""'P"-P42-5980to- "P-580"'' C"' "P-580-D' "P-581-B"' "P-581-C"' "P-581-D"' "P-582"' "P-582-B"' "P- 582-C"' "P-582-D"' "P-583"' "P-583-B"' "P-583-C"' "P-583-D"' "P-584"' """PPP---555888749"--BB' """P'' ""-PP5--855788-49B--"CC' """''P""-PP5--855798-35C-"C"' '""P"' P"-5P-58-5589-8B0"'""''"""PPP---555898806--B"B'"""'P'"-"P5P-8-55689-8B0-"-CC' """'P' -""5PP8--5658-9C91"""''' ""5PP9--355"99' 14"--PBC-""5,'93""P-PA--55"99' 51""-P'C-"5"P'9-3"5-P9B-5"5-'9A"2"P"''-5""P9P3-5--5C995"2-'B-"A"P"'-'5"P9"4P-5"-95' 59"-2PC--B5"'9"4'"P-"A-P5"-9'599""P2'--5C"P9"4-' 5-B9"P9"--' A", "P-599-B"' "P-599-C"' "P-600"' "P-600-A"' "P-60 1"' "P-60 1-A"' "P- 602"' "P-602-A"' "P-603"' "P-603-A"' and "P-603-B"' for not being found in the records of the case. Thereafter, upon the filing of petitioner's Omnibus Motion for Reconsideration, which was filed on May 17, 2024,73 and respondent having failed to file a comment,74 the Court, in its Resolution dated October 2, 2024,75 admitted "EPx-h5i8b1it-sD""P'-"5P8-05"8' 2"P"'-5"8P0-5-B82"'-B"P"-'5"8P0--5C8"2'-"CP"-'58"P0--D58' 2"-PD-5"8' 1"-PB-"5'8"3P"-' 581-C" ' "P-583-B"' "P-583-C"' "P-583-D"' "P-584"' "P-584-B"' "P-584-C"' "P- 585", "P-585-B"' "P-586"' "P-586-B"' "P-586-C"' "P-587"' "P-587-B"' "P- 587-C"' "P-588"' "P-588-B"' "P-588-C"' "P-589"' "P-589-B"' "P-589-C"' ""PP--559932-"C, ""'P"-P5-9529-0A""' '"P"P-5-59902-B-B"'""' P"-P5-9509-2C-C"'""'P"-P59-519"3' ""P' -"5P9-15-9B3"-A' ""P'-5"P9-15-9C3"-' B59"5' -"AP"-'5"9P3--5C9"5'-B"P"-' 5"9P4-5"'95"P-C-5"9' "4P-A-5"9' 9""P' -"5P9-45-9B9"-A' ""P' "-5P9-549-C9-"B' ""'P"-P5-9559"9' -"CP"-' "P-600"' "P-600-A"' "P-60 1"' "P-60 1-A"' "P-602"' "P-602-A"' "P-603"' "P- 603-A", and "P-603-B". Thereafter, on November 25, 2024, petitioner filed its Memorandum.76 Respondent, however, failed to file his memorandum.77 The present case was considered submitted for decision on January 14, 78 2025 \ 73 Docket- Vol. V, pp. 1976 to 1986. 74 Records Verification dated June 25,2024, issued by the Judicial Records Division of this Court, Docket- Vol. V, p. 2109. 75 Docket- Vol. V,pp.2112to2115. 76 Docket- Vol. V, pp. 2117 to 2170. 77 Records Verification dated January 7, 2024 issued by the Judicial Records Division of this Court, Docket- Vol. V, p. 2174. 78 Minute Resolution dated January 14, 2025, Docket- Vol. V, p. 2175.

DECISION CTA Case Nos. 9455,9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 9 of26 THE STIPULATED ISSUES As stipulated by the parties, the issues for this Court's resolution are: Whether petitioner is entitled to refund for the unutilized VAT input taxes in the total amount ofP17,216,478.45 forTY 2014; 1. Whether petitioner is entitled to the refund ofthe unutilized input VAT it paid in the amount of Three Million, Five Hundred Thousand, Eight Hundred Sixty-Five and 27/100 Pesos (P3,592,865.27) for the first quarter of TY 2014 (CTA Case No. 9455); 2. Whether petitioner is entitled to the refund ofthe unutilized input VAT it paid in the amount of One Million, Nine Hundred Five Thousand, and 61100 Pesos (P1,905,076.06) for the second quarter ofTY 2014 (CTA Case No. 9500); 3. Whether petitioner is entitled to the refund ofthe unuti] ized input VAT in the amount of Nine Million, Eight Hundred Eighty-Four Thousand, One Hundred Seven and 521100 Pesos (P9,884,107.52) for the third quarter of TY 2014 (CTA Case No. 9529); and, 4. Whether petitioner is entitled to the refund ofthe unutilized input VAT in the amount of One Million, Eight Hundred Thirty-Four Thousand, Four Hundred Twenty-Nine and 60/100 Pesos (P1,834,429.60) for the fourth quarter ofTY 2014 (CTA Case No. 9555).79 Petitioner's arguments: Petitioner argues that it timely filed its administrative and judicial claims for refund and/or issuance of tax credit; that it is a VAT-registered entity; that it is engaged in zero-rated or effectively zero-rated sales; that input taxes being claimed are due or paid; that the input taxes are due or paid and have not been applied against output taxes during the quarter and in the succeeding quarters; that the input taxes being claimed are attributable to zero- rated sales. Petitioner claims that it is entitled to a claim for refund or issuance of tax credit certificate of unutilized input taxes attributable to zero-rated sales/receipts forTY 2014 in the total amount ofl"l7,216,478.45.1 79 Statement of the Issues, JSFI, Docket- Vol. 2, pp. 656 to 657.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 10 of26 Respondent's counter-arguments: Respondent, in his Answers, contends that claims for refund are governed by one same rule-that respondent still has to investigate and ascertain the veracity of the claim. Respondent posits that taxes paid and collected are presumed to have been paid in accordance with law and regulations, hence, not refundable and, to validly claim for refund, it is imperative for petitioner to prove its compliance with the requirements laid down by the National Internal revenue Code (NIRC) of 1997, as amended, and its implementing rules and regulations. For a tax credit or refund, like tax exemption, is strictly construed against the taxpayer. The taxpayer has the burden of proving his claims for refund; that petitioner must prove that its export sale qualifies as VAT zero-rated pursuant to Section 106(A)(2)(a)(l) of the NIRC of 1997, as amended; and, that petitioner must prove that it complied with the invoicing requirements provided in Section 113 of the NIRC of 1997, as amended; that petitioner must also prove that it complied with the provisions of Section 4.110-8 ofRevenue Regulations (RR) No. 16- 05, as amended, as to the substantiation of Input Tax Credits. Respondent avers that petitioner must comply with the requirements provided under Revenue Memorandum Order No. 53-98; and that petitioner failed to comply with the requirements set-forth under the NIRC of 1997, as amended, to validly warrant refund/tax credit of allegedly unutilized input taxes for TY 2014. Finally, respondent asserts, that the judicial claim for the third quarter ofTY 2014 was filed on January 26,2017, or more than two years after the close of the taxable quarter when the sales were made. THE COURT'S RULING The present consolidated Petitions for Review lack merit. Requisites under the law for the refund or issuance of tax credit certificate ofinput VAT. Section 112 ofthe NIRC of 1997, as amended by Republic Act (R.A.) No. 9337,80 provides, in part, as follows: 81 SEC. 112. Refunds or Tax Credits ofInput Tax. - ~ 80 AN ACT AMENDING SECTIONS 27, 28, 34, 106, 107,108, 109,110,111, 112,113, 114, 116,117, 119, 121, 148, 151,236,237 AND 288 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES. 81 The administrative and judicial claims were filed prior to the effectivity ofR.A. No. 10963, also known as Tax Reform for Acceleration and Inclusion (TRAIN); hence, the provisions applicable to the present case are that of the NIRC of 1997, prior to the TRAIN amendments.

DECISION CTA Case Nos. 9455,9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 11 of26 (A) Zero-rated or Effectively Zero-rated Sales. - Any VAT- registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(l), (2) and (b) and Section 108(B)(l) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section 108(B)(6), the input taxes shall be allocated ratably between his zero-rated and nonzero-rated sales. XXX XXX XXX (C) Period within which Refund or Tax Credit ofInput Taxes shall be Made.- In proper cases, the Commissioner shall grant a refund or issue a tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals. Based on the foregoing provision, jurisprudence has laid down certain requisites which the taxpayer-applicant must comply with to successfully obtain a credit/refund of input VAT. Said requisites are classified into certain categories, to wit: As to the timeliness ofthe filing ofthe administrative and judicial claims: 1. the refund claim is filed with the BIR within two years after the close of the taxable quarter when the sales were made;82 2. in case of full or partial denial of the refund claim, or the failure on the part of the Commissioner to act on the said\ 82 Intel Technology Philippines, Inc. vs. Commissioner ofinternal Revenue, G.R. No. 166732, April 27, 2007; San Roque Power Corporation vs. Commissioner of Internal Revenue, G.R. No. 180345, November 25, 2009; and AT&T Communications Services Philippines, Inc. vs. Commissioner ofInternal Revenue, G.R. No. 182364, August 3, 2010.

DECISION CTA Case Nos. 9455,9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 12 of26 claim within a period of 120 days, the judicial claim has been filed with this Court, within 30 days from receipt of the decision or after the expiration of the said 120-day period;83 With reference to the taxpayer's registration with the BIR: 3. the taxpayer is a VAT-registered person;84 In relation to the taxpayer's output VAT: 4. the taxpayer is engaged in zero-rated or effectively zero-rated sales�' 85 5. for zero-rated sales under Section 106(A)(2)(a)(l), (2) and (b) and Section 108(B)(1) and (2), the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with the BSP rules and regulations;86 As regards the taxpayer's input VAT being refunded: 6. the input taxes are not transitional input taxes;87 7. the input taxes are due or paid;88 8. the input taxes claimed are attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume;89 and, 9. the input taxes have not been applied against output taxes during and in the succeeding quarters90~ 83 Steag State Power, Inc. (Formerly State Power Development Corporation) vs. Commissioner ofInternal Revenue, G.R. No. 205282, January 14, 2019; Rohm Apollo Semiconductor Philippines vs. Commissioner ofInternal Revenue, G.R. No. 168950, January 14,2015. 84 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, supra; San Roque Power Corporation vs. Commissioner of Internal Revenue, supra; and AT&T Communications Services Philippines, Inc., vs. Commissioner ofInternal Revenue, supra. 85 Id. 86 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, supra; San Roque Power Corporation vs. Commissioner of Internal Revenue, supra; and AT&T Communications Services Philippines, Inc., vs. Commissioner ofInternal Revenue, supra. 87 !d. 88 !d. 89 Intel Technology Philippines, Inc. vs. Commissioner ofInternal Revenue, supra; and San Roque Power Corporation vs. Commissioner ofInternal Revenue, supra. 90 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, supra; San Roque Power Corporation vs. Commissioner of Internal Revenue, supra; and AT&T Communications Services Philippines, Inc. vs. Commissioner ofInternal Revenue, supra.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 13 of26 In addition, in claims for VAT refund/credit, applicants must satisfy the substantiation and invoicing requirements under the NIRC and other implementing rules and regulations.91 Thus, petitioner's compliance with all the VAT invoicing requirements is required to be able to file a claim for input taxes attributable to zero-rated sales.92 The invoicing and substantiation requirements should be followed because it is the only way to determine the veracity of the taxpayer's claims.93 Moreover, it must be pointed out that compliance with all the VAT invoicing requirements provided by tax laws and regulations is mandatory.94 Strict compliance with substantiation and invoicing requirements is necessary considering VAT's nature and VAT system's tax credit method, where tax payments are based on output and input taxes and where the seller's output tax becomes the buyer's input tax that is available as tax credit or refund in the same transaction. It ensures the proper collection of taxes at all stages of distribution, facilitates computation of tax credits, and provides accurate audit trail or evidence for BIR monitoring purposes.95 Furthermore, it must be emphasized that in cases filed before this Court, which are litigated de novo, party-litigants must prove every minute aspect of their case.96 Thus, it behooves petitioner to show compliance with each ofthe foregoing requisites and invoicing requirements. As a corollary, the absence of any ofthe said requisites is already a valid ground to deny the refund claim. First and second requisites: Petitioner timely filed its administrative andjudicial claims. The first requisite provided in Section 112(A) of the NIRC of 1997, as amended, commands the taxpayer to file an administrative claim for input VAT refund within two years from the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. \ 91 Team Energy Corporation vs. Commissioner ofInternal Revenue, et seq., G.R. Nos. 197663 and 197770, March 14,2018. 92 JR. A. Philippines, Inc. vs. Commissioner ofInternal Revenue, G.R. No. 171307, August 28, 2013. 93 Nippon Express (Philippines) Corporation vs. Commissioner of Internal Revenue, G.R. No. 191495, July 23,2018. 94 Eastern Telecommunications Philippines, Inc. vs. Commissioner ofInternal Revenue, G.R. No. 183531, March 25, 2015. 95 Team Energy Corporation vs. Commissioner ofInternal Revenue, et seq., supra. 96 Edison (Bataan) Cogeneration Corporation vs. Commissioner ofInternal Revenue, et seq., G.R. Nos. 201665 and 201668, August 30, 20 17; Commissioner ofInternal Revenue vs. Philippine National Bank, G.R. No. 180290, September 29, 2014; Commissioner of Internal Revenue vs. United Salvage and Towage (Phils.), Inc., G.R. No. 197515, July 2, 2014; Dizon vs. Court ofTax Appeals, et al., G.R. No. 140944, Apri130, 2008; Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue, G.R. No. 145526, March 16, 2007; and Commissioner ofInternal Revenue vs. Manila Mining Corporation, G.R. No. 153204, August 31, 2005.

DECISION CTA Case Nos. 9455,9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 14 of26 The present claim covers the four quarters ofTY 2014 from January 1, 2014 to December 31, 2014. As illustrated below, counting two years from the close of the subject taxable quarters, petitioner timely filed its administrative claims before the expiration of the two-year period: Period Covered Close of Taxable Last Day to File Filing of (TY 2014) Quarter Administrative Claim Administrative Claim 1st Quarter March 31,2014 March 31, 2016 March 30, 201697 June 29, 201698 �� �� 2nd Q~~rter June 30, 2014 September 29, 201699 December 22, 2016100 jrd Q~<irt~~ September 30, 2016 �� 4ih��Q~~rt~r December 31, 2016 ���������������������'���������������� As regards the second requisite, the same necessitates that the judicial claim must have been filed within 30 days from receipt of respondent's decision or after the expiration of the 120-day period under Section 112(C) of the NIRC of 1997, as amended. Contrary to respondent's contention, under Section 112(C) ofthe NIRC of 1997, as amended, it is not necessary that petitioner file its judicial claim for refund within two years after the close of the taxable quarter when the sales were made. Petitioner correctly pointed out that in the case of Mindanao I Geothermal Partnership vs. Commissioner of Internal Revenue, 101 the Supreme Court stated that it had already previously "clarified that the two (2)- year period only applies to administrative claims, and does not extend to judicial claims." From the filing of petitioner's administrative claims as detailed above, respondent had 120 days therefrom, or until the following dates, to decide on the petitioner's claim for refund: Period Covered Filing of Administrative Last Day to Act on the (TY 2014) Claim Administrative Claim 1st Quarter March_3Q,_2016 J~ly 2�, ~01� June 29, 2016 October 27, 2016 2nd Quarter September 29,~016 January_ 27, ~017 Q~cember 22,)Q 16 3id Quarter J\pril21,2017 4th Q~c:uter , Petitioner did not receive any decision from respondent regarding its claims for the first and second quarters of TY 2014 before July 28, 2016 and _ _ _ _- _ _ 97 Exhibits "P-8" and "P-9", Docket- Vol. III, pp. 1302 to I3 I0. 98 Exhibits "P-10" and "P-1 I", Docket- Vol. III, pp. 1311 to 1320. 99 Exhibits "P-12" and "P-13", Docket- Vol. III, pp. 1321 to 1330. 100 Exhibits "P-14" and "P-15", Docket- Vol. III, pp. 1331 to 1340. 101 G.R. No. 197519, November 8, 2017.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maiharara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 15 of26 October 27, 2016, respectively. Hence, it filed the corresponding judicial claims on August 26, 2016,102 and on November 25, 2016,103 within 30 days from the expiration of the 120-day period for each of those claims. On the other hand, petitioner received the letters of denial from respondent for its claims in relation to the third and fourth quarters ofTY 2014 on January 4, 2017,104 and on March 1, 2017, 105 respectively. Counting 30 days therefrom, petitioner had until February 3, 20 14 and March 31, 201 7 to file its judicial claims for refund for the said periods, respectively. In sum, the present Petitions for Review were likewise timely filed on the following dates: Period Last Day to Act on Petitioner's Receipt Filing of Judicial Administrative of Respondent's Claim Claim Decision A~g~st ~6, 2016 July 28, 2016 November~?, 2016 Octo~~r 2],20 16 Janu(l.ry~6,.2017 March 2~ 1 ~Ql] Such being the case, the Court finds that petitioner complied with the above-stated first and second requisites. Third requisite: Petitioner is a VAT- registered entity. It is undisputed that petitioner also satisfied the third requisite since it is duly registered with the BIR as a VAT taxpayer with TIN 007-843-328- 000.106 Fourth and fifth requisites: Petitioner failed to sufficiently establish its zero- rated sales. The fourth and fifth requisites require that the taxpayer be engaged in zero-rated or effectively zero-rated sales and, for zero-rated sales under Sections 106(A)(2)(a)(l ), (2) and (b), and 108(B)(l) and (2) of the NIRC of 1997, as amended, the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP rules and regulations. '\ 102 Docket- Vol. I (CTA Case No. 9455), pp. 12 to 33. 103 Docket- Vol. I (CTA Case No. 9500), pp. 14 to 36. 104 Exhibit "P-42", Docket- Vol. IV, pp. 1610 to 1618. 105 Exhibit "P-50", Docket- Vol. IV, p. I715. 106 Exhibit"P-7",Docket-Vol.III,p.l301.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 16 of26 In its Memorandum, petitioner claims that the sale of fuel from renewable energy sources or power generated from renewable energy such as geothermal energy is a transaction or activity subject to zero percent (0%) VAT pursuant to Section 108(B)(7) of the NIRC of 1997, as amended, and by R.A. No. 9513, otherwise known as the "Renewable Energy Act of2008". Indeed, Section 108(B)(7) ofthe NIRC of 1997, as amended, provides that the sale of power generated through renewable sources of energy is among the transactions subject to 0% VAT, to wit: SEC. 108. Value-added Tax on Sale ofServices and Use or Lease of Properties. - XXX XXX XXX (B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate: XXX XXX XXX (7) Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels. (Emphasis supplied) Further, Section 4.1 08-5(b)(7) ofRR No. 16-2005,107 implementing the foregoing provision, qualifies the applicability of such zero-rating as follows: SECTION 4.108-5. Zero-Rated Sale of Services.- XXX XXX XXX (b) Transactions Subject to Zero Percent (0%) VAT Rate. - The following services performed in the Philippines by a VAT-registered person shall be subject to zero percent (0%) VAT rate: XXX XXX XXX (7) Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal and steam, ocean energy, and other emerging sources using technologies such as fuel cells and hydrogen fuels; Provided, however, that zero-rating shall apply strictly to the sale ofpower or fuel generated through renewable sources of energy, and shall not extend to the sale of services related to the maintenance or operation of plants generating said power. (Emphasis supplied) \ 107 SUBJECT: Consolidated Value-Added Tax Regulations of2005.

DECISION CTA Case Nos. 9455,9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 17 of26 As a corollary to the above provision, Section 4.1 08-3(�) ofRR No. 16- 2005 states: SECTION 4.108-3. Definitions and Specific Rules on Selected Services.- XXX XXX XXX (f) Sale of electricity by generation, transmission, and distribution companies shall be subject to 10% VAT on their gross receipts: Provided, That sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy, and other emerging sources using technologies such as fuel cells and hydrogen fuels shall be subject to 0% VAT. "Generation companies" refers to persons or entities authorized by the Energy Regulatory Commission (ERC) to operate facilities used in the generation of electricity. For this purpose, generation of electricity refers to the production of electricity by a generation company or a co-generation facility pursuant to the provisions of the R.A. No. 9136 (EPIRA). They shall include all Independent Power Producers (IPPs) and NPC/Power Sector Assets and Liabilities Management Corporation (PSALM)-owned generation facilities. (Emphasis supplied) Moreover, Section 15(g) ofR.A. No. 9513, grants certain tax incentives to Renewable Energy (RE) developers, such as petitioner. The pertinent portion of which is reproduced below: CHAPTER VII GENERAL INCENTIVES Section 15. Incentives for Renewable Energy Projects and Activities. - RE Developers of renewable energy facilities, including hybrid systems, in proportion to and to the extent of theRE component, for both power and non-power applications, as duly certified by the DOE, in consultation with the BOI, shall be entitled to the following incentives: XXX XXX XXX (g) Zero Percent Value-Added Tax Rate- The sale of fuel or power generated from renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy and other emerging energy sources using technologies such as fuel cells and hydrogen fuels, shall be subject to zero percent (0%) value-added tax (VAT), pursuant to the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No. 9337. All REDevelopers shall be entitled to zero-rated value-added tax on its purchases of local supply of goods, properties and services needed for the development, construction and installation of its plant facilities. ,

DECISION CTA Case Nos. 9455,9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 18 of26 This provision shall also apply to the whole process of exploring and developing renewable energy sources up to its conversion into power, including, but not limited to, the services performed by subcontractors and/or contractors. (Emphasis supplied) Moreover, Part III, Rule 5, Section 13.G, of the Implementing Rules and Regulations (IRR) ofR.A. No. 9513,108 provides: SEC. 13. Fiscal Incentives for Renewable Energy Projects and Activities - DOE-certified existing and new RE Developers of RE facilities, including Hybrid Systems, in proportion to and to the extent of the RE component, for both Power and Non-Power Applications, shall be entitled to the following incentives: XXX XXX XXX G. Zero Percent Value-Added Tax Rate The following transactions/activities shall be subject to zero percent (0%) value-added tax (VAT), pursuant to the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No. 9337: (a) Sale of fuel from RE sources or power generated from renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels; (b) Purchase of local goods, properties and services needed for the development, construction, and installation of the plant facilities of RE Developers; and (c) Whole process of exploration and development of RE sources up to its conversion into power, including, but not limited to, the services performed by subcontractors and/or contractors." (Emphasis supplied) Based on the foregoing provisions, all RE Developers are entitled to zero-rated VAT on their purchases of local supply of goods, properties and services needed for the development, construction and installation of plant facilities. Furthermore, the law declares that the VAT zero-rating applies to the whole process of exploring and developing renewable energy sources up to its conversion into power, including but not limited to the services performed by subcontractors and/or contractors.~ 108 Department of Energy Circular No. DC2009-05-0008 dated May 25, 2009.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 19 of26 However, the same Part III, Rule 5 ofthe IRR ofR.A. No. 9513 further states the conditions for the availment of incentives and other privileges under the said law. Section 18(A), (B), and (C) thereof reads: SEC. 18. Conditions for Availment of Incentives and Other Privileges A. Registration/Accreditation with the DOE For purposes of entitlement to the incentives and privileges under the Act, existing and new RE Developers, and manufacturers, fabricators, and suppliers of locally-produced RE equipment shall register with the DOE, through the Renewable Energy Management Bureau (REMB). The following certifications shall be issued: (1) DOE Certificate of Registration -issued to an RE Developer holding a valid RE Service/Operating Contract. For existing RE projects, the new RE Service/Operating Contract shall pre-terminate and replace the existing Service Contract that the RE Developer has executed with the DOE subject to the Transitory Provision in Rule 13, Section 39. The DOE Certificate of Registration shall be issued immediately upon award of an RE Service/Operating Contract covering an existing or new RE project or upon approval of additional investment. Any investment added to existing RE projects shall be subject to prior approval by the DOE. XXX XXX XXX B. Registration with the Board of Investments (BOI) The RE sector is hereby declared a priority investment sector that will regularly form part of the country's Investment Priority Plan (IPP), unless declared otherwise by law. To qualify for the availment of the incentives under Sections 13 and 15 of this IRR, RE Developers and manufacturers, fabricators, and suppliers of locally-produced RE equipment, shall register with the BOI. The registration with the BOI shall be carried out through an agreement and an administrative arrangement between the BOI and the DOE, with the end-view of facilitating the registration of qualified RE facilities. The applications for registration shall be favorably acted upon immediately by the BOI, on the basis of the certification issued by the DOE. C. Certificate ofEndorsement by the DOE RE Developers, and manufacturers, fabricators, and suppliers of locally- produced RE equipment shall be qualified to avail of the incentives provided for in the Act only after securing a Certificate of~

DECISION CTA Case Nos. 9455,9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 20 of26 Endorsement from the DOE, through the REMB, on a per transaction basis. The DOE, through the REMB, shall issue said certification within fifteen (15) days upon request of the RE Developer or manufacturer, fabricator, and supplier; Provided, That the certification issued by the DOE shall be without prejudice to any further requirements that may be imposed by the government agencies tasked with the administration of the fiscal incentives mentioned under Rule 5 of this IRR. XXX XXX xxx. (Emphasis and underscoring supplied) However, the DOE, expressing its contemporaneous interpretation on the conditions for the availment of incentives and other privileges of RE Developers under R.A. No. 9513, issued DC No. DC2021-12-0042, amending Section 18(C) of the IRR ofR.A. No. 9513, to state that, as a rule, RE Developers are automatically qualified to avail of the incentives provided for in R.A. No. 9513 after securing a DOE Certificate ofRegistration and that a Certificate of Endorsement is necessary only on importations by an RE developer, viz.: SEC. 18. Conditions for Availment of Incentives and Other Privileges- XXX XXX XXX C. DOE ENDORSEMENT FOR AVAILMENT OF INCENTIVES AND DUTY-FREE IMPORTATIONS OF MACHINERY, EQUIPMENT, AND MATERIALS RE Developers and manufacturers, fabricators, and suppliers of locally-produced RE equipment shall be AUTOMATICALLY qualified to avail of the incentives provided for in the Act, OTHER THAN THE INCENTIVE OF DUTY-FREE IMPORTATION OF QUALIFIED MACHINERY, EQUIPMENT, MATERIALS, PARTS AND COMPONENTS, after securing a Certificate of Registration from the DOE. RE DEVELOPERS THAT IMPORT RE EQUIPMENT, EQUIPMENT, MATERIALS, PARTS AND COMPONENTS SHALL SECURE A CERTIFICATE OF ENDORSEMENT FROM THE DOE, THROUGH THE REMB, ON A PER IMPORTATION BASIS. XXX XXX xxx (Underscoring supplied) Thus, in order to qualify for and be entitled to VAT zero-rating on an REDeveloper's purchases as contemplated under R.A. No. 9513 and its IRR, the RE developer must present the following documents: 1. Registration with the DOE; and, 2. Registration with the Board of Investments (BOI). ~

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 21 of26 Petitioner is an RE developer registered with the DOE under DOE Certificate ofRegistration No. GRESC 2011-01-025,109 and with the BOI as a "New Renewable Energy Developer of a 20 MW Maibarara Geothermal Power Generation Project". 110 Hence, petitioner is entitled to zero-rated purchases from its local suppliers of goods, properties and services needed for the development, construction, and installation of the plant facilities and for the whole process of exploration and development of RE sources up to its conversion into power. To qualify for VAT zero-rating, petitioner must, however establish by sufficient evidence that it is engaged in the sale ofpower or fuel generated through renewable sources of energy. Based on its Articles ofIncorporation, 111 petitioner's primary purpose is to explore, extract, exploit, or otherwise obtain from the earth, store, hold, use, treat, reinject, prepare for market, buy, sell, distribute, exchange and transport geothermal steam and brine, and all their products, compounds and derivatives; to convert geothermal energy into electric power and to build, construct, erect, own, equip, install, operate, maintain, sell, lease power generation plants, facilities, machineries, equipment that utilize, geothermal energy; to sell, trade, transmit or distribute any electricity generated by such power plants; to utilize geothermal steam and brine for industrial, agricultural, health, tourism, mineral recovery and processing and other similar direct and indirect uses of geothermal steam and brine. Records likewise show that petitioner was issued a Certificate of Compliance by the Energy Regulatory Commission on October 7, 2013,112 confirming its ownership and operation of a geothermal power plant located in Sitio Capoz, Brgy. San Rafael, Sto. Tomas, Batangas. In addition, its BIR Certificate of Registration indicates as its line of business/industry the generation, collection, and distribution of electricity. 113 Nevertheless, petitioner must still show compliance with the pertinent invoicing requirements under Section 113(A) and (B) of the NIRC of 1997, as amended, and as implemented by Section 4.113-1(A) and (B) ofRR No. 16-2005, which provide that a VAT taxpayer, like herein petitioner, shall for every lease of goods or properties, and for every sale, barter or exchange of services, issue a VAT official receipt which must contain the information stated in the said provisions. Also, the official receipts (ORs) must be duly registered with the BIR as prescribed under Section 23 7, in relation to Section 238 of the NIRC of 1997, as amended.~ 109 Exhibit "P-3", Docket- Vol. III, p. 1291. 110 Exhibit "P-4", Docket- Vol. III, p. 1292. 111 Exhibit "P-2", Docket- Vol. III, p. 1277. 112 Exhibit "P-6", Docket- Vol. III, p. 1300. 113 Exhibit "P-7", Docket- Vol. III, p. 130 I.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 22 of26 In its original and amended Quarterly VAT Returns for TY 2014, petitioner reported total sales amounting to P574,795,034.15, consisting of vatable sales of P912,366.56, and zero-rated sales of P573,882,667.59, as summarized below: Period Vatable Sales Zero-Rated Sales Total First Quarter114 p 3Q,532.59 P 39,032,?QO.OO P 39~Q?7,5QO.OO , S~co~d Quarte~115 2??,?50.00 191,31?,244.16 191,?4?,776.75 228,083.97 137,763,292.98 . Thi~4 Qu~~~i1 205,768,630.45 ))?~4J?,Q42.9? p 912,366.56 ' .f~Yrth Quarte~Ti 7 p 573,882,667.59 205,996,714.42 p 574,795,034.15 ' Total Petitioner's zero-rated sales for TY 2014 are broken down as follows: Exhibit No. Date OR Client Amount of Zero-rated (USB, Exhibit No. Sales June 26, 2014 Trans-Asia Oil and Energy "P-54" 0505 Development Corp()ration p 39,Q32,?99:00 Nov. 24, 2014 Trans-Asia Oil and Energy Dec:)},2014 0519 Development Corporation 66,9??~893. 77 0522 Trans-Asia Oil and Energy ()2,??0,058.67 Develop11.1ent Corporation Trans-Asia Oil and Energy 6}~556,489.46 Development Corporation Trans-Asia Oil and Energy 69,670,690.35 Development Corporation p 573,882,667.59 Trans-Asia Oil and Energy Develop11.1ent Corporation Trans-Asia Oil and Energy Devel()pment Corp()ration Trans-Asia Oil and Energy Dey~j()pment C()rporation Trans-Asia Oil and Energy Develop11.1ent Corporation Trans-Asia Oil and Energy Development C()rporation Total Upon scrutiny of the aforesaid supporting ORs, however, the Court finds that petitioner failed to meet the invoicing requirement, particularly its failure to indicate the nature of services it performed in the supporting ORs. Section 113 of the NIRC of 1997, as amended by R.A. No. 9337, provides the VAT invoicing requirements under the law, to wit:~ 114 Exhibit"P-17",Docket-Vol.III,pp.1350to 1352. 115 Exhibit "P-19", Docket- Vol. III, pp. 1363 to 1371. 116 Exhibit "P-21 ", Docket- Vol. III, pp. 1382 to 1390. 117 Exhibit"P-22",Docket-Vol.III,pp.1391 to 1403.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 23 of26 SEC. 113.Jnvoicing and Accounting Requirements for VAT- registered Persons. - (A) Invoicing Requirements.- A VAT-registered person shall issue: ( 1) A VAT invoice for every sale, barter or exchange of goods or properties; and (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. (B) Information Contained in the VAT Invoice or VAT Official Receipt. - The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: Provided, That: " (a) The amount of the tax shall be shown as a separate item in the invoice or receipt; (b) If the sale is exempt from value-added tax, the term 'VAT- exempt sale' shall be written or printed prominently on the invoice or receipt; (c) If the sale is subject to zero percent (0%) value-added tax, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt; (d) If the sale involves goods, properties or services some of which are subject to and some ofwhich are VAT zero-rated or VAT-exempt, the invoice or receipt shall clearly indicate the break-down of the sale price between its taxable, exempt and zero-rated components, and the calculation of the value-added tax on each portion of the sale shall be shown on the invoice or receipt: Provided, That the seller may issue separate invoices or receipts for the taxable, exempt, and zero-rated components of the sale. (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and (4) In the case of sales in the amount of One thousand pesos (P 1,000) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and Taxpayer Identification Number (TIN) of the purchaser, customer or client. XXX XXX XXX~

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 24 of26 Implementing the foregoing provision, Section 4.113-1 of RR No. 16- 2005118 provides as follows: SEC. 4.113-l.lnvoicing Requirements.- (A) A VAT-registered person shall issue: (1) A VAT invoice for every sale, barter or exchange of goods or properties; and (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. Only VAT-registered persons are required to print their TIN followed by the word 'VAT' in their invoice or official receipts. Said documents shall be considered as a 'VAT Invoice' or VAT official receipt. All purchases covered by invoices/receipts other than VAT InvoiceNAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. (B) Information contained in VAT invoice or VAT official receipt. - The following information shall be indicated in VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his TIN; (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided, That: (a) The amount of tax shall be shown as a separate item in the invoice or receipt; (b) If the sale is exempt from VAT, the term 'VAT-exempt sale' shall be written or printed prominently on the invoice or receipt; (c) If the sale is subject to zero percent (0%) VAT, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt; (d) If the sale involves goods, properties or services some of which are subject to and some of which are VAT zero-rated or VAT- exempt, the invoice or receipt shall clearly indicate the break-down of the sale price between its taxable, exempt and zero-rated components, and the calculation of the VAT on each portion of the sale shall be shown on the invoice or receipt. The seller has the option to issue separate invoices or receipts for the taxable, exempt, ______an_d_z.e_r_o_-_ra_t_ed_components ofthe sale."\ of20~5. 118 SUBJECT: Consolidated Value-Added Tax Regulations

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 25 of26 (3) In the case of sales in the amount of one thousand peso (Pl ,000.00) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and TIN of the purchaser, customer or client, shall be indicated in addition to the information required in (1) and (2) of this Section. In sum, based on the foregoing, the following information, among others, are required to be indicated in the VAT invoice or VAT OR, to wit: a. Date of transaction; b. Quantity; c. Unit cost; and d. Description of the goods or properties or nature of the service. The Court, however, observed that petitioner did not indicate in particularity the nature of the service(s) in the ORs but only the billing statement number. The law is clearly worded in stating that the "nature of service", among others, is required to be indicated in the duly registered VAT official receipt. Consequently, the Court cannot ascertain whether the payments received are indeed for the services claimed to have been rendered by petitioner. Apropos, the importance of complying with the substantiation and invoicing requirements of the law is hereby reiterated. It also bears stressing that, in Coca-Cola Bottlers Philippines, Inc. vs. Commissioner of Internal Revenue, 119 the Supreme Court said: On a final note, the Court reiterates its consistent ruling that actions for tax refund or credit, as in the instant case, are in the nature of a claim for exemption and the law is not only construed in strictissimi juris against the taxpayer, but also the pieces of evidence presented entitling a taxpayer to an exemption is strictissimi scrutinized and must be duly proven. The burden is on the taxpayer to show that he (or she) has strictly complied with the conditions for the grant of the tax refund or credit. Since taxes are the lifeblood of the government, tax laws must be faithfully and strictly implemented as they are not intended to be liberally construed. (Emphasis supplied) An applicant for a claim for tax refund or tax credit must not only prove entitlement to the claim but also compliance with all the documentary and evidentiary requirements. 120 Unfortunately, petitioner failed to prove that its sales of services are subject to the zero percent (0%) VAT rate, pursuant to \ 119 G.R. No. 222428, February 19,2018. 120 Eastern Telecommunications Philippines, Inc. vs. Commissioner ofInternal Revenue, G.R. No. 183531, March 25,2015.

DECISION CTA Case Nos. 9455, 9500, 9529 & 9555 Maibarara Geothermal, Inc. vs. Commissioner ofInternal Revenue Page 26 of26 Section 108(B)(7) of the NIRC of 1997, as amended, and R.A. No. 9513; hence, the Court cannot grant its claim for the refund of the unutilized input VAT attributable thereto. As such, it is no longer necessary to further discuss or determine petitioner's compliance with the other remaining requisites to successfully obtain a credit/refund of input VAT. WHEREFORE, in light of the foregoing considerations, the present consolidated Petitions for Review are DENIED for lack of merit. SO ORDERED. c~!.'~ER~ Associate Justice WE CONCUR: lA.~-r MA. BELEN M. RINGPIS-LIBAN Presiding Justice ustice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the consolidated cases were assigned to the writer of the opinion of the Court. ~- ~ -1'- MA. BELEN M. RINGPIS-LIBAN Presiding Justice